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CORPORATION; WYLE LABORATORIES, INC.; EASTERN SOLID WASTE EQUIPMENT COMPANY, INC.; CHURCHDALE LEASING INC.; A.C. REALTY; ATTWOODS, INC.; PAUL C. MURPHY, INC.; ALVIN H. WHITE; AVE MARIA CARITE, AS EXECUTOR OF THE ESTATE OF CHARLES CARITE; STEPHEN MINER, AS EXECUTOR OF THE ESTATE OF CHARLES CARITE; ANTHONY CARITE, JR.; UTICA MUTUAL INSURANCE COMPANY, THIRD-PARTY DEFENDANTS. ATLANTIC DISPOSAL SERVICE, INC., ALVIN WHITE, A.C. REALTY, AVE MARIE CARITE, AS EXECUTOR OF THE ESTATE OF CHARLES CARITE, AND STEPHEN MINER, AS EXECUTOR OF THE ESTATE OF CHARLES CARITE, APPELLANTS.
No. 94-5681.United States Court of Appeals, Third Circuit.Argued July 26, 1995.
Filed October 23, 1995.
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Sanford F. Schmidt (Argued), Gerston, Cohen Grayson, Haddonfield, NJ, for Appellants Atlantic Disposal Service, Inc., Alvin White and A.C. Realty.
Joseph H. Kenney (Argued), Kenney Kearney, Cherry Hill, NJ, for Appellants Ave Maria Carite and Stephen Miner, as Executors of the Estate of Charles Carite.
Albert M. Ferlo, Jr. (Argued), United States Dept. of Justice, Environment Natural Resources Division, Washington, DC, for Appellee.
On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 90-3068).
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Before: BECKER and ALITO, Circuit Judges, VANASKIE, District Judge[*] .
[1] OPINION OF THE COURT
VANASKIE, District Judge
[4] I. FACTS AND PROCEDURAL HISTORY [5] A. The Statutory Liability Scheme
[6] “Congress enacted CERCLA to facilitate the cleanup of potentially dangerous hazardous waste sites, with a view to the preservation of the environment and human health.” Tippins, Inc. v. USX Corp., 37 F.3d 87, 92 (3rd Cir. 1994). One of the principal purposes of CERCLA is “to force polluters to pay for costs associated with remedying their pollution.” United States v. Alcan Aluminum Corp., 964 F.2d 252, 259-60 (3rd Cir. 1992).
(1) The owner and operator of a facility from which there has been a release or threatened release of hazardous substances necessitating responsive action, Section(s) 107(a)(1);
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[8] Potentially responsible parties described by subsections (1) and (2) are generally known as “owners” and “operators”; those who fall under subsection (3) are generally known as “generators” and sometimes referred to as “arrangers”; and those who fall under subsection (4) are commonly known as “transporters.”[3] See Atlantic Richfield Co. v. Blosenski, 847 F. Supp. 1261, 1271 (E.D.Pa. 1994). Liability of responsible parties is strict i.e., not dependent on a finding of fault. See Tippins, 37 F.3d at 92.[4] This appeal involves the question of whether the record before the district court established that ADS, White, Carite and/or A.C. Realty should be held liable as “transporters” of hazardous substances to the Tabernacle Site.[5](2) A person who owned or operated such a facility at the time hazardous substances were deposited there, Section(s) 107(a)(2);
(3) A person who arranged for the transportation, disposal or treatment of hazardous substances at such a facility, Section(s) 107(a)(3); and
(4) A person who had accepted hazardous substances for transportation to a facility selected by that person, Section(s) 107(a)(4).[2]
[9] B. The Potentially Responsible “Transporter” Parties
[10] White and Carite formed ADS in 1963. ADS was engaged in the business of hauling waste from commercial and industrial establishments. At the time of incorporation, Carite owned 50 percent of ADS’ stock, White owned 49 percent of the stock, and the remaining one percent was owned by White’s spouse.[6] From its incorporation until 1991, when its assets were sold, White and Carite were the sole officers and directors of ADS. White was the President of ADS; Carite was its Secretary/Treasurer.
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In 1971, they incorporated Eastern Solid Waste Equipment Company, Inc. (“ESWECO”). Although initially intended to operate as a distributor of refuse collection equipment, ESWECO essentially served as a maintenance company for the equipment used and buildings occupied by ADS. ESWECO was owned by relatives of White and Carite, but White and Carite served as the sole officers of that corporation.
[12] Carite and White were also the sole partners in A.C. Realty, which was the owner of approximately 8.5 acres of land located in Mt. Laurel, New Jersey. Facilities constructed on a three-acre section of this parcel were leased to ADS. In the late 1970’s, A.C. Realty leased another acre of land to Atlantic Recovery and Transfer Systems, Inc. (“ARTS”), which operated a waste transfer station adjacent to ADS.[7] [13] Also in the late 1970’s, White and Carite established A.C. Enterprises, a partnership that leased containers and trucks to ADS. In 1982, A.C. Enterprises sold its assets to Churchdale Leasing, Inc., a Subchapter S corporation owned by White and Carite, who were its sole officers and directors. Churchdale Leasing continued to lease rolling stock and containers to ADS. [14] ESWECO, A.C. Realty, and A.C. Enterprises dealt solely with ADS and other companies established by White and Carite. Neither A.C. Realty nor A.C. Enterprises had any employees; ADS employees performed the work of these partnerships.[8][15] C. The Tabernacle Site
[16] One of the ADS industrial accounts during the 1970’s was a plant operated by USX Corporation in Camden, New Jersey. ADS hauled 55-gallon drums of liquid waste from the USX facility to a landfill in Gloucester County. When the Gloucester County landfill refused to accept the USX drums, arrangements were made to dispose of the drums on a 1-acre wooded parcel in Tabernacle, New Jersey, leased by Robert Ware, an ADS mechanic. Ware’s understanding was that ADS would pay him a fixed amount for each drum dumped at the Tabernacle Site.
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Site.[10] The ensuing negotiations resulted in an agreement by USX to perform the RD/RA. ADS, however, refused to participate in the environmental remediation work.
[21] D. Procedural History
[22] In August, 1990, the United States commenced this cost recovery action pursuant to Section 107 of CERCLA, 42 U.S.C.A. Section(s) 9607 (1995), naming as defendants only USX and ADS. Liability was sought to be imposed on USX as a “generator,” and ADS was alleged to be liable as a “transporter.”
The settlement reached by the settling parties will encompass the following claims set forth in the pleadings in this action: (1) All the United States’ claims in its amended complaint except for a request for declaratory judgment for future response costs against the non-settling defendants; and (2) All claims by and between USX and defendants Attwoods, Churchdale Leasing, [ESWECO and Paul C. Murphy, Inc.]. Thus, the settlement will resolve all triable issues related to the United States’ claims and the United States has no need at this time to participate in the pretrial conference scheduled for March 16, 1994. [A. 180-81a, emphasis added.]
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[26] In a footnote in this letter, the United States also stated:[27] The United States did not participate in the final pretrial conference, which was conducted on March 16, 1994. A jury trial commenced in June of 1994. In light of the settlement with the United States, the trial was limited to cross-claims between USX and Attwoods, on the one hand, and the ADS Defendants on the other.[15] After several days of trial, USX, Attwoods, and the ADS Defendants announced that they had reached a settlement. The basic terms of the settlement were that the ADS Defendants would pay $2 million to USX, and in exchange would receive a general release from USX as well as an agreement by USX to indemnify them for any future response cost incurred by the United States at the Tabernacle Site. They also would obtain from Attwoods a general release with respect to the Tabernacle Site. (A. 59a.-65a.) [28] At the time that counsel for the ADS Defendants placed on the record the settlement of the cross-claims, he requested “that this case . . . be dismissed with prejudice. . . .” (A. 61a.) Counsel for the United States objected to the dismissal with prejudice, observing:The Court has already ruled that the non-settling defendants are liable to the United States under Section 107(a) of CERCLA. Since the settlement will resolve the United States’ claim for past costs, the only relief that the United States may ask this court for is a declaratory judgment of liability for future costs against the non-settling defendants. [A. 180a.][14]
[29] On August 15, 1994, the United States filed a motion for a declaratory judgment against the ADS Defendants for future costs that may be incurred at the Tabernacle Sites. The ADS Defendants responded to the request for declaratory relief by moving for dismissal for failure to prosecute arising out of the fact that the United States had not participated in the preparation of the final pretrial order and had not attended the trial. In an Opinion dated September 20, 1994, the district court granted the United States’ motion and denied the ADS Defendants’ motion. [30] The ADS Defendants filed a timely notice of appeal, reasserting that the United States had effectively abandoned its request for declaratory relief. They also argue that the district court’s summary judgment rulings on liability are erroneous. [31] The district court had jurisdiction pursuant to 28 U.S.C. Section(s) 1331 as the United States’ claims arose under federal law. We have appellate jurisdiction under 28 U.S.C. §(s) 1291.This Court already ruled each one of those defendants is a liable party here. A settlement with the USX and Attwoods defendants deals with our present and past costs, but it does not deal with potential future costs at the site.
I just want to let the Court know that if they were to move to dismiss with prejudice, the Government might oppose that motion at that time. [A. 66a-67a.]
[32] II. DISCUSSION [33] A. The Failure to Prosecute Issue
[34] The ADS Defendants contend that by failing to participate in the final pretrial conference and the trial itself, the United States effectively abandoned its claim for a declaratory decree as to future response costs, thus warranting dismissal of the United States’ action against the ADS Defendants under Fed.R.Civ.P. 41(b) for failure to prosecute. We review the denial of a Rule 41(b) motion for an abuse of discretion. See Adams v. Trustees of the New Jersey Brewery Employees’ Pension Trust Fund, 29 F.3d 863, 870 (3rd Cir. 1994). Factors pertinent to the exercise of discretion in considering a
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failure to prosecute motion include: (1) the personal responsibility of the plaintiff; (2) prejudice to the defendants; (3) a history of dilatoriness; (4) the willfulness or bad faith of the plaintiff’s conduct; (5) the adequacy of sanctions less drastic than dismissal; and (6) the meritoriousness of the plaintiff’s claims. Id. The district court properly considered these factors in denying the ADS Defendants’ motion to dismiss.
[35] As the district court observed, there was no history of dilatoriness on the part of the United States; nor was there any evidence that the United States had acted in bad faith or with the intent to “ambush” the ADS Defendants, as they contend. Instead, when the United States announced its settlement with USX and Attwoods, it specifically informed the district court that declaratory relief with respect to future costs may be sought. The United States also indicated that, in light of the resolution of its claim for past response costs, it would not be participating in the pretrial conference or trial. There clearly was no need for the United States to attend a pretrial conference or sit through trial merely to preserve a claim for declaratory relief based solely on the district court’s summary judgment rulings. When the ADS Defendants informed the district Court of their settlement, the United States once again reserved the right to seek the declaratory judgment to which it was entitled under Section(s) 113(g)(2) of CERCLA.[16] Under these circumstances, failure of the United States to participate in the final pretrial conference and trial cannot be considered to be bad faith conduct. [36] Moreover, in light of the district court’s summary judgment rulings, the United States’ claim for a declaratory judgment as to liability for future response costs was clearly meritorious. Section 113(g)(2) of CERCLA, 42 U.S.C.A. Section(s) 9613(g)(2)(1995), provides that in any Section(s) 107 cost recovery action the district court shall issue a declaratory judgment on liability for response costs or damages that will be binding in any subsequent action to recover further response costs.[17] As explained in Kelley v. E.I. DuPont De Nemours Co., 17 F.3d 836, 844 (6th Cir. 1994):[37] The ADS Defendants contend that the meritoriousness of the United States’ claim does not erase the prejudice to them. But the prejudice claimed by the ADS Defendants flows from the effect of the declaratory judgment to which the United States was entitled as a result of the summary judgment liability determinations, and is not attributable to any dilatory conduct on the part of the United States.[18] The absence of the United States from the pretrial conference and trial did not impair the ADS Defendants’ ability to defend against a claim for declaratory relief. While pursuit of the request for declaratory relief may seem to be unnecessary from a practical point of view (especially because USX has agreed to indemnify the ADS Defendants in connection with futureIn providing for the recovery of response costs, Congress included language to insure that a responsible party’s liability, once established, would not have to be relitigated . . . . The entry of [a] declaratory judgment as to liability is mandatory. United States v. Kramer, 757 F. Supp. 397, 412 (D.N.J. 1991). The fact that future costs are somewhat speculative is `no bar to a present declaration of liability.’ United States v. Fairchild Indus., Inc., 766 F. Supp. 405, 415 (D.Md. 1991).
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response costs), it was certainly within the prerogative of the United States to seek such relief. Clearly, the ADS Defendants’ claimed prejudice did not warrant dismissal of the United States cost recovery action. Accordingly, the district court did not abuse its discretion in declining to dismiss the claim for declaratory relief.
[38] B. The Summary Judgment Liability Rulings
[39] We have plenary review of summary judgment rulings. See Tippins, 37 F.3d at 91. Our task is to determine whether the record before the district court disclosed a genuine issue as to any material fact and, if not, whether the United States was entitled to prevail on its liability theories against each of the ADS Defendants. A factual dispute is “genuine” if the evidence “is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if proof of its existence or non-existence would affect the outcome of the lawsuit under the law governing the case. Id.
[40] 1. The Liability of ADS as a “Transporter” Under Section(s) 107(a)(4) of CERCLA.
[41] Liability as a “transporter” is established by showing that a person accepted hazardous substances for transport and either selected the disposal facility or had substantial input into deciding where the hazardous substance should be disposed. See Tippins, 37 F.3d at 94. In this case, the evidence established that during the pertinent time frame ADS accepted for disposal drummed liquid waste generated by USX. It is undisputed that the drummed liquid waste of USX contained hazardous substances.
[45] 2. The Liability of White and Carite as “Transporters” Under Section(s) 107(a)(4) of CERCLA.
[46] The appeal from the summary judgment ruling against White and Carite presents an issue of first impression in this Court: what standard of liability did Congress intend to establish under CERCLA for principal
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shareholders and officers of a closely-held corporation that transports hazardous substances? Congress did not directly address this issue in the statute itself.[19] Nor does the sparse legislative history answer the question presented here.[20]
[47] White and Carite argue that the district court erred in concluding that a corporate officer “could be held liable for cleanup costs under CERCLA upon a showing of active involvement in the day-to-day operations of the [corporation].” (January 11, 1994 D.Ct. Slip.Op. at 6.) According to White and Carite, “[a] showing of personal participation in the conduct that violated the statute should be required because it is the most consistent with corporate law principles.” (Appellants’ Reply Br. at 8.)[21] The United States, generally relying upon cases that address the question of who may be held liable as an “operator” of a hazardous waste facility, contends that the district court correctly ruled that White and Carite are liable under Section(s) 107(a)(4) “[b]ased on their control and intimate involvement in the waste disposal and transportation business of ADS . . . .” (United States Br. at 22.) [48] It is “axiomatic that the starting point for interpreting a statute is the language of the statute itself.” Tippins, 37 F.3d at 92. Section 107(a)(4) of CERCLA provides that “any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release . . . of a hazardous substance, shall be liable . . . .” 42 U.S.C.A. Section(s) 9607(a)(4) (1995). I Tippins, we held that Section(s) 107(a)(4) imposed liability on a waste transportation corporation “not only if it ultimately selects the disposal facility, but also when it actively participates in the disposal decision to the extent of having had substantial input into which facility was ultimately chosen.” 37 F.3d at 94. We explained that this “`active participation’ standard advances the objectives of CERCLA by recognizing the reality that transporters often play an influential role in the decision to dispose waste at a given facility.” Id. at 95. [49] The express terms of Section(s) 107(a)(4), as interpreted i Tippins, limit liability to those “persons” who accept hazardous substances for transport and have a substantial inputPage 822
into the selection of the disposal facility. Thus, Section(s) 107(a)(4) plainly imposes liability on corporate officers and shareholders if they participate in the liability-creating conduct.
[50] The United States contends that Congress also intended to impose liability on those who control the affairs of a responsible corporation, irrespective of whether those in control actually participate in the liability-creating conduct. According to the United States, the courts have generally construed CERCLA as permitting recovery from those corporate officers who “participated in the management of or exercised control over a corporate entity.” (United States Br. at 22.) Extending liability to those controlling a corporation, according to the United States, is consistent with “CERCLA’s goal of `placing the ultimate responsibility for cleanup on those responsible for problems caused by the disposal of chemical poisons.'” (United States Br. at 23.) [51] CERCLA, of course, is to be construed liberally to effectuate its goals. United States v. Alcan Aluminum Corp., 964 F.2d 252, 258 (3rd Cir. 1992). “Liberal construction,” however, may not be employed “as a means for filling in the blanks so as to discern a congressional intent to impose liability under nearly every conceivable scenario.” United States v. Cordova Chemical Co., 59 F.3d 584, 588 (6th Cir. 1995). In light of the established principle of limited liability that protects corporate officers or employees who do not actually participate in liability-creating conduct, there must be some basis in the statute itself, beyond its general purpose, to support the conclusion that Congress intended to impose liability on those who control the corporation’s day-to-day activities. [52] A statutory basis for imposing liability due to “actual control” of a corporation has been recognized in cases brought under Section(s) 107(a)(1) and (a)(2) of CERCLA, which explicitly cover both “owners” and “operators” of hazardous waste facilities. See Lansford-Coaldale Joint Water Authority v. tonolli Corp., 4 F.3d 1209, 1220-21 (3rd Cir. 1993). As we explained in Lansford-Coaldale, by making an “operator” of a facility a potentially responsible party, “it is at least clear that Congress has expanded the circumstances under which a corporation may be held liable for the acts of an affiliated corporation such that, when a corporation is determined to be the operator of a subsidiary or sister corporation, traditional rules of limited liability for corporations do not apply.” Id. at 1221.[22] See also United States v. Kayser-Roth Corp., 910 F.2d 24, 26 (1st Cir. 1990), cert. denied, 498 U.S. 1084(1991)(“Congress, by including a liability category in addition to owner (`operator’) . . . implied that a person who is an operator of a facility is not protected from liability by the legal structure of ownership.”) [53] The “actual control” test is a standard to be employed to determine whether a parent corporation is the actual “operator” of a hazardous waste facility and thus may be held directly liable without consideration of the factors necessary to pierce the corporate veil. “The actual control test imposes liability which would not be consistent with `traditional rules of limited liability for corporations’ . . . .” FMC Corp. v. U.S. Dept. of Commerce, 29 F.3d 833, 843 (3rd Cir. 1994). Under the “actual control” test for operator liability, “a corporation will be liable for the environmental violations of another corporation if there is evidence that it exercised `substantial control’ over the other corporation. At a minimum, substantial control requires `active involvement in the activities’ of the other corporation.” Id. However, it is not necessary to show that “a corporation controlled the environmental decisions of an affiliated corporation . . . .” Lansford-Coaldale, 4 F.3d at 1222 n. 13. “[A] company may be considered an operator even if it did not exert control over the hazardous waste disposal decisions of an affiliated corporation, as long as there is otherwise sufficient indicia of substantial management control over the
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affairs of the affiliate.” Id. at 1224 n. 17.[23] Thus, the “actual control” standard of operator liability balances “the benefits of limited liability with CERCLA’s remedial purposes.” Lansford-Coaldale, 4 F.3d at 1221.
[54] Our adoption of the “actual control” standard was based upon a determination that “CERCLA’s language . . . indicates an intentto hold a corporation liable for the environmental violations of its subsidiaries and sister corporations, if it is otherwise determined to have operated the facility in question.” Id. at 1221 n. 11 (emphasis added). But we did not find congressional intent to disregard the concept of limited liability in all contexts. On the contrary, we recognized that “owner” and “operator” liability were distinct concepts, and that traditional principles of corporate law would not permit “owner” liability to be extended to a corporate parent unless piercing the corporate veil was warranted. Id. at 1220. In short, “the long standing rule of limited liability in the corporate context remains the background norm. . . .” Id. at 1221. [55] The cases upon which the United States relies to urge adoption of an “actual control” test under Section(s) 107(a)(4) of CERCLA do not address the question of whether CERCLA’s language permits such a result. Cases such as United States v. Carolina Transformer Co., 978 F.2d 832 (4th Cir. 1992); New York v. Shore Realty Corp., 759 F.2d 1032, 1052 (2d Cir. 1985); and Bowen Engineering v. Estate of Reeve, 799 F. Supp. 467, 473-74 (D.N.J. 1992), are not supportive of the United States’ position because they concern the liability of a corporate officer, shareholder or director as an “operator” of a hazardous waste facility under Section(s) 107(a)(1) and (a)(2) of CERCLA, a category of potentially responsible parties not included in Section(s) 107(a)(4). Cases such as United States v. Northeastern Pharmaceutical Co., 810 F.2d 726, 744 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987); United States v. Northernaire Plating Co., 670 F. Supp. 742, 747 (W.D.Mich. 1987); United States v. Bliss, 667 F. Supp. 1298, 1307 (E.D.Mo. 1987); United States v. Ward, 618 F. Supp. 884, 894-96 (E.D.N.C. 1985); an United States v. Mottolo, 605 F. Supp. 898, 913-14 (D.N.H. 1985), essentially support the position advanced by White and Carite because these cases concern liability under Section(s) 107(a)(3) for individuals who actually participated in arranging for the disposal of hazardous substances. None of these cases can be read as standing for the proposition that liability under section 107(a)(4) may be imposed based solely on control of the day-to-day activities of the corporate transporter without evidence of participation in the liability-creating conduct.[24]
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[56] Although it may be preferable to have the same liability standard apply to individual officers, shareholders and directors under each subsection of Section(s) 107(a), CERCLA’s language fails to indicate that traditional concepts of limited liability are to be disregarded under Section(s) 107(a)(4). “The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.” Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U.S. 494, 501 (1986). At the time CERCLA was enacted, it was firmly established that control of a corporation, in and of itself, was not a basis for imposing liability on a corporate officer for the actions of other corporate officers or employees. Instead, actual participation in the wrongful conduct was a prerequisite See, generally, 3A William F. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations, Section(s) 1137 (perm ed. rev. 1994); Richard G. Dennis, Liability of Officers, Directors and Stockholders Under CERCLA: The Case for Adopting State Law, 36 Vill. L. Rev. 1367, 1411 (1991). [57] Congress could have specified that majority shareholders or officers of corporations engaged in the waste hauling business are personally responsible for releases of hazardous substances from disposal facilities selected by their companies. Congress could have utilized the phrase “owner or operator” of a transporter, just as it used the phrase “owner or operator” of a facility. It did neither. On the contrary, the sparse legislative history indicates that Congress anticipated that “`issues of liability not resolved by this Act . . . shall be governed by traditional and evolving principles of common law.'” Lynda J. Oswald, Strict Liability of Individuals Under CERCLA: A Normative Analysis, 20 B.C. Envtl. Aff. L. Rev. 579, 590 n. 41 (1993). Under these circumstances, it is appropriate to limit liability to those persons who are clearly made liable by the language Congress used — those who actively participate in the process of accepting hazardous substances for transport and have a substantial role in the selection of the disposal facility.[25] [58] This result is not inconsistent with CERCLA’s “`essential purpose’ of making `those responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for remedying the harmful conditions they created.'” Lansford-Coaldale, 4 F.3d at 1221. Our application of section 107(a)(4) as it was written does not immunize officers and directors who personally participate in liability-creating conduct. Although the scope of liability may be greater under section 107(a)(1) and (a)(2), CERCLA’s language compels that result. It is not our prerogative to resolve the inconsistencies that permeate CERCLA.[26] Our task is to enforce congressional intent as it is made manifest in the language of the statute and legislative history. Our analysis of these rudimentary fonts of legislative intent compels us to apply Section(s) 107(a)(4) as written, a result that comports with traditional concepts ofPage 825
limited liability for officers, directors and shareholders.[27]
[59] Accordingly, we conclude that liability may not be imposed under Section(s) 107(a)(4) solely on the basis of an officer’s or shareholder’s active involvement in the corporation’s day-to-day affairs. Instead, there must be a showing that the person sought to be held liable actually participated in the liability-creating conduct. [60] Contrary to the assertion of White and Carite, however, liability under Section(s) 107(a)(4) is not limited to those who “personally participated in the transportation of hazardous wastes.” (Appellants’ Reply Br. at 8.)[28] It is not necessary that the officer personally accept the waste for transport. Cf., United States v. Northeastern Pharmaceutical Co., 810 F.2d at 743 (“proof of personal ownership or actual physical possession of hazardous substances” is not a precondition for liability under Section(s) 107(a)(3)). Nor is it necessary that the officer participate in the selection of the disposal facility. Liability may be imposed where the officer is aware of the acceptance of materials for transport and of his company’s substantial participation in the selection of the disposal facility. An officer who has authority to control disposal decisions should not escape liability under Section(s) 107(a)(4) when he or she has actual knowledge that a subordinate has selected a disposal site and, effectively, acquiesces in the subordinate’s actions Cf., Donsco , Inc. v. Casper Corp., 587 F.2d 602, 606 (3rd Cir. 1978)(a corporate president’s knowledge and approval of wrongful acts “is sufficient actual participation in the wrongful acts” to make him individually liable). [61] While the district court held that White and Carite could be held liable based upon “[a]n abundance of evidence . . . that White and Carite were active hands on managers of ADS during the time when the Tabernacle dumping occurred,” (January 11, 1994 D.Ct. slip op. at 6), it also observed that there was “even greater support” for its conclusion in light of the fact that White and Carite were principals of a waste disposal company. The district court reasoned that “the likelihood is greatly diminished that the owners and operators of the company would be unaware of improper dumping.” (Id. at 7.) [62] Although there was indeed substantial evidence that White and Carite were actively involved in the day-to-day affairs of ADS at the time of the disposal of waste drums at the Tabernacle Site, there was also countervailing evidence that White and Carite were not “hands on” managers during the relevant time period. Moreover, White submitted an affidavit disavowing knowledge of disposal of drums at the Tabernacle Site. (A. 188a.) Corroboration for White’s assertion may be inferred from the fact that during the relevant time frame he supervised the sales and administrative staff and did not have active involvement in operational aspects of the business. [63] Anthony “Tony” Carite, Jr., the younger brother of Charles Carite, testified thatPage 826
Charles Carite had few specific responsibilities in the day-to-day business. Tony Carite was the operations manager of ADS. the ADS dispatcher and truck drivers at the time of the Tabernacle Site dumping testified that they reported directly to Tony Carite and had little, if any, involvement with Charles Carite.
[64] While testimony of some ADS drivers, laborers and other plant employees concerning the active involvement of White and Carite in the day-to-day activities of ADS, if viewed as credible, could support an inference that White and Carite knew of the decision to dump drums at the Tabernacle Site and acquiesced in that decision, the testimony of other ADS employees, if credited, would not support that inference.[29] The evidence proffered by the United States was not so overwhelming as to render White and Carite’s denial of knowledge completely implausible. Under these circumstances, the United States was not entitled to summary judgment against White and Carite. See United States v. Premises Known as 717 So. Woodward St., 2 F.3d 529, 533-34 (3rd Cir. 1993). Indeed, “issues of knowledge and intent are particularly inappropriate for resolution by summary judgment, since such issues must often be resolved on the basis of inferences drawn from the conduct of the parties.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Accordingly, the declaratory judgment in favor the United States and Against White and Carite will be reversed and remanded for further proceedings.[65] 3. The Liability of A.C. Realty As a Joint Venturer With ADS
[66] Transporter liability under Section(s) 107(a)(4) is imposed on a covered “person,” which CERCLA defines as including a joint venture. 42 U.S.C.A. Section(s) 9601(21)(1995). Each member of a joint venture “is considered the agent of the others, so that the act of any member within the scope of the enterprise is charged vicariously against the rest.” Pritchett v. Kimberling Cove, Inc., 568 F.2d 570, 579-80 (8th Cir. 1977), cert. denied, 436 U.S. 922 (1978). As noted above, the district court held that, as a matter of law, ADS, A.C. Realty, ESWECO, and A.C. Enterprises operated as a joint venture with regard to the waste disposal at the Tabernacle Site.[30]
(1) The contribution by each party of money, property, effort, knowledge or some other asset to a common undertaking;
(2) The existence of a joint property interest in the subject matter of the venture;
(3) The right of mutual control or management of the venture; and
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[68] Inter-City Tire And Auto Center, Inc. v. Uniroyal, Inc., 701 F. Supp. 1120, 1126 (D.N.J. 1988), aff’d mem. sub nom. Uniroyal, Inc. v. Erbesh, 888 F.2d 1382 (3rd Cir. 1989)(table). The existence of a genuine dispute as to any of these elements precludes summary judgment. Id. [69] We need go no further than the first element, the existence of an agreement to form a joint venture, to conclude that a genuine issue of material fact precludes summary judgment on A.C. Realty’s liability. Although the principle on which the district court relied in addressing this element, that the acts or conduct of the parties may imply the existence of an agreement, is correct standing alone, the existence of the requisite agreement is not(4) An agreement to share the profits or losses of the venture.
the only inference that could be drawn from the facts of record. [70] In his affidavit, White disclaims any intention to form a joint venture. Undisputed facts tend to corroborate White’s disclaimer. For example, separate financial statements were prepared for ADS, A.C. Realty, ESWECO, and A.C. Enterprises. Each entity maintained a separate bank account. Moreover, each enterprise was created at a different point in time, and the function of each entity appears to have evolved over time. Entities were formed not to share profits, but to maximize earnings for White and Carite. For example, the district court noted that ESWECO became a maintenance company so that White and Carite could take advantage of lower workers’ compensation rates. It is not unusual for owners of closely held corporations to establish separate entities that are intended to provide some insulation from tort liability or avoid high employment costs. From the facts of this case, a jury could rationally conclude that White’s disclaimer of an intent to form a joint venture is credible. [71] We have previously held that “a court should be reluctant to grant a motion for summary judgment when resolution of the dispositive issue requires a determination of state of mind, for in such cases much depends upon the credibility of witnesses testifying as to their own states of mind, and assessing credibility is a delicate matter best left to the fact finder.”Metzger v. Osbeck, 841 F.2d 518, 521 (3rd Cir. 1988). Where, as here, the facts permit competing inferences concerning the existence of an agreement to form a joint venture, the issue must be submitted to the fact finder.[31] Contrary to the assertion of the United States, the evidence it has proffered is not so overwhelming that a fact finder would necessarily have to infer the existence of the requisite agreement.[32] Accordingly, the United States was not entitled to summary judgment against A.C. realty.
[72] III. CONCLUSION
[73] For the foregoing reasons, the declaratory judgment of the district court is reversed in part and affirmed in part and this case is remanded to the district court for further proceedings consistent with this Opinion.
Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section —
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of the disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for —
(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;
(B) any other necessary costs of response incurred by an other person consistent with the national contingency plan;
(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release; and
(D) the costs of any health assessment or health effects study carried out under section 9604(i) of this title. 42 U.S.C.A. 9607(a)(1995).
The term “person” as used in Section(s) 107(a) is defined to include “an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State or any interstate body.” 42 U.S.C.A. Section(s) 9601(21).
In every . . . action [for recovery of response costs under Section(s) 107], the court shall enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages. [Emphasis added.]
CERCLA was enacted on December 11, 1980 in the last days of the 96th Congress. The final version of the Act was conceived by an ad hoc committee of Senators who fashioned a last minute compromise which enabled the Act to pass. As a result, the statute was hastily and inadequately drafted. The only legislative history on the compromise is found in the floor debates.
The legislative history does not articulate any congressional intent with respect to the potential liability of corporate officers and individual shareholders. See Richard G. Dennis, Liability of Officers, Directors and Shareholders Under CERCLA,: The Case for Adopting State Law, 36 Vill. L. Rev. 1367, 1447 (1991).
An officer of a corporation who takes part in the commission of a tort by the corporation is personally liable for resulting injuries; but an officer who takes no part in the commission of the tort is not personally liable to third persons for the torts of other agents, officers, or employees of the corporation. Officers and directors may be held individually liable for personal participation in tortious acts even though they derived no personal benefit, but acted on behalf, and in the name of, the corporation, and the corporation alone was enriched by the acts.
It is not necessary that the `corporate veil’ be pierced in order to impose personal liability as long as it is shown that the corporate officer knowingly participated in the wrongdoing. However, it is necessary to pierce the corporate veil in order to impose personal liability upon a non-participating corporate officer.
(11th Cir. 1993); United States v. Kayser-Roth Corp., 910 F.2d 24
(1st Cir. 1990), cert. denied, 498 U.S. 1084 (1991). Two other circuits have held that liability may be imposed on a parent corporation based upon its authority to control the affairs of its subsidiary. See Kaiser Aluminum Chem. Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1341 (9th Cir. 1992); Nurad, Inc. v. William E. Hooper Sons Co., 966 F.2d 837 (4th Cir.), cert. denied, 113 S.Ct. 377 (1992). At least one circuit has held that “a parent corporation incurs operator liability pursuant to Section(s) 107(a)(2) of CERCLA, for the conduct of its subsidiary corporation, only when the requirements necessary to pierce the corporate veil are met.” United States v. Cordova Chemical Co., 59 F.3d at 590.
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